This area is designed to provide all required information ahead of the Petropavlovsk Annual General Meeting, which is to be held on 29 June 2018 at the offices of Buchanan, 107 Cheapside, London EC2V 6DN.
On 8 May 2018, the Company received a requisition from two shareholders, CABS Platform Limited (‘CABS’) and Slevin Ltd (‘Slevin’), which together hold 9.1% of the Company’s issued share capital, requesting the proposal of ordinary resolutions at its forthcoming AGM to remove all existing Directors of the Company, and to appoint three previous Directors to the Board; Dr Pavel Maslovskiy, Sir Roderic Lyne and Robert Jenkins.
The Board recommends that shareholders vote against the Requisitioned Resolutions 13 to 23 as these will not promote the success of and are not in the best interests of the Company and its shareholders as a whole. The Board also recommends shareholders vote in favour of resolutions 1 to 12 as these are in the best interests of the Company and its shareholders as a whole.
- Strengthening of the current Board through:
- The appointment of Roman Deniskin, a highly respected CEO with over 20 years of experience in the Russian mining industry;
- The appointment of Adrian Coates, an additional Independent Non-Executive Director; and
- The Board is close to appointing another Independent Non-Executive Director with a focus on HSE excellence and is in the processing of recruiting a CFO.
- The Board adheres to best practice standards for listed companies on composition and development, remuneration, shareholder relations, accountability and audit.
- The Board can confidently state that it is fully compliant with the UK Corporate Governance Code.
- Conversely, the Requisitioners proposals will not comply with the UK Corporate Governance Code.
- CABS and Slevin only appeared on the share register in March 2018, with no attempts to speak with the current management prior to investing.
- CABS & Slevin refused to engage with the Board to discuss their strategy for Petropavlovsk prior to the requisition.
- The Nominee Directors have refused to disclose the identity of the controlling shareholders of the entities that are proposing them.
- The Board calls on the mystery owners’ Nominee Directors to exercise their duty to treat all shareholders equally and to disclose what they know of the mystery owner and any arrangements that they may have with other shareholders.
- The Board sees no sign yet of a decision-maker with the requisite experience in the gold mining sector to:
- Make the specific claims in the requisition.
- Possess the financial resources to set this scheme up.
- Have the required expertise to formulate a strategy that will deliver returns for all shareholders.
- Should the requisitioning resolutions be passed, it is not known that the proposed Chairman or Non-Executive Director would be independent.
- Petropavlovsk has outperformed its peer group, following the appointment of the new Board at the 2017 AGM.
- The Company has undertaken a strategy over the past year focused on achieving organic growth through maximizing operations and strengthening the balance sheet.
- The stabilising role of the current Board has ensured consistent and material progress has been achieved by the Company during a transitional period, as shown by the Company:
- Maintaining steady production levels alongside the Company’s ongoing development projects; and
- Successfully refinancing the Group’s debt, demonstrating investors’ confidence in the current Board.
- From 22 June 2012 to 22 June 2017, the previous Board and management presided over an 96% decline in the share price.
- The requisitions are highly disruptive to the business and follow Dr Maslovskiy’s abrupt resignation in July 2017 with no succession plan in place, which caused a significant operational and strategic void.
- Consistent and stable leadership is key to ensuring that shareholders’ best interests are served.